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How’d You Get That Number?! is the show that asks B2B SaaS leaders one simple question: where did that goal actually come from?
Hosted by Daren Ladua and brought to you by Outset, each episode unpacks how career-defining KPIs, revenue targets, and growth goals were set in the first place and what happened next.
If you're building go-to-market teams or chasing big numbers, this is the real story behind the metrics.
[00:00:00] Sean Crafts: Oftentimes misses our lags. We did hit the number, we got to that run rate probably six to eight months after we anticipated it because of a, just a lack of understanding of how the funnel was gonna work in those dimensions. It came like we got onto that run rate. It just, we were six or eight months behind.
[00:00:25] Daren Lauda: You are listening to How'd You Get That Number brought to you by Outset. This is the show where B2B SaaS leaders break down their real stories behind the goals, KPIs and revenue targets that shaped their careers, and how those numbers were set in the first place. I'm your host, Daren Lauda.
[00:00:45] Daren Lauda: Welcome everyone. I'm really excited to invite Sean Crafts to the show today. I've known Sean for while going on 15 years, we've had the chance to work together twice, and Sean's a really interesting dude in a lot of ways. Number one, I watched him take a company from Zero as a co-founder all the way through a hundred million dollars that great centar status with A and B and C rounds and all that kind of fun stuff.
[00:01:09] Daren Lauda: Then I watched Sean build a venture studio. Full disclosure, I'm part of it. Sean's helping build the company that, uh. I'm the CEO of now, and frankly, Sean is just a great person. He's somebody you would wanna know personally and professionally, so I'm really excited to have him on the show today. Sean, welcome.
[00:01:24] Daren Lauda: Thanks for being here, Daren. Thank you for having me. Thank you for that intro. Absolutely. Give us a bit more, tell us just a bit more about yourself so people know who you are and what you're all about. We
[00:01:34] Sean Crafts: will start personally, um, born and raised Southern California. Been all over the country for school and work.
[00:01:41] Sean Crafts: But mostly Southern California. Kinda got pulled in to technology in the late nineties. Didn't know that's what I wanted to do. This was, you know, dot com, world On Fire. Gonna retire in 12 months, jumped into of all things an AI company back before anybody knew what AI was. It was called artificial intelligence back then, and it was a company out of MIT's artificial intelligence lab, a natural language processing.
[00:02:08] Sean Crafts: I was the seventh employee and was involved for a nine year run where we tried to figure out a really cool technology and how to turn it into a business, how to monetize it. Eventually turned it into web self service, and then knowledge management. I. And then when we sold that company, uh, started and that company was called Inquirer.
[00:02:27] Sean Crafts: We sold that company, uh, started a software company here in Orange County called Mavenlink with two co-founders, Ray Granger and Roger Neil. We'd all worked together at Enquirer and we were, by the way, anytime I seem to start something that's financial crisis time, so I'm hoping we're now on the other side of that and that with the studio we're in.
[00:02:46] Sean Crafts: Good. You know, we're on the other side of things. But 2009 World was collapsing and we're like this. Cloud computing has this opportunity to allow people to work together more efficiently and effectively across business boundaries That eventually became Mavenlink, which eventually became professional services automation.
[00:03:05] Sean Crafts: As you mentioned, we have great opportunity to grow that. And when we sold that, I decided I really enjoyed the earlier stages. It's what I love, the people that I love working with. Love doing that too. Um, and so before I knew what a company creation studio or a venture studio was, we started BLDG labs and then started.
[00:03:27] Sean Crafts: Uh, talking to a lot of folks and realized there was a model out there that existed. Uh, kind of, I'm kind of glad I didn't see the model before I started DLDG labs 'cause it allowed us to have some independent thinking and the way we constructed it and the way we think about it. Part of that independent thinking led to HLX, which is consulting advisory technical services firm.
[00:03:49] Sean Crafts: Across all things go to market. And so the combination of BODG and HLX is keeping me incredibly busy. Uh, my wife and five kids roll their eyes every time, like, what are you doing this for again? Uh, and I apologize to them on a daily basis 'cause it's insane, but
[00:04:10] Daren Lauda: it's what I love. That's awesome. You know, I've said from my perspective, if I knew how to fix an engine in the garage.
[00:04:17] Daren Lauda: Or work with wood, that will be by builder fun. But like you, I like building things from scratch and building companies in this case, which is a real joy. You had one thing you didn't mention, which is kind of interesting. I. You went to law school, your path was to be a lawyer and then in 2009, well I guess a bit before the big crash, you said, nevermind.
[00:04:36] Daren Lauda: I went into startup plan. That's pretty crazy. Well, no. Well, okay, so I was in law
[00:04:41] Sean Crafts: school in the nineties when I said I got pulled out. I was in, uh, bay Area in Berkeley. And so I was watching nearby every the law school interview, try every firm interview I went to, they were talking about. How they wish they had gone into technology.
[00:04:56] Sean Crafts: I'm like, well, wait a second. I still had a chance. Why am I jumping into this? Nobody's liking their jobs. I'm gonna go do that. And so, yeah, it was the, it was 99. I jumped into a company called Answer Friend. When we bought, uh, electric Knowledge, we merged and became Enquirer. So, yeah, so I, I left law school and then 2009 and before we started Maven Link, my wife made me take the bar.
[00:05:19] Sean Crafts: And again, back to like, just like total fear, like, oh my gosh, what is he doing? This is insane. You know, we bare boned it for nine years, we finally get a little money and now he's putting it all back into another thing. We, this is what's he doing to me? And so he's like, you at least have to take the bar.
[00:05:37] Sean Crafts: In case this doesn't work out so you can go be a lawyer. And I, I didn't have the heart to tell and nobody was gonna hire a kid who went to law school in the nineties and took the bar 10 years later. 'cause it pretty much shows you don't like the law. But
[00:05:50] Daren Lauda: I went with it. That's fantastic. I love this story.
[00:05:53] Daren Lauda: Look, started with law school moving into the startup world. Had a centar kind of exit. Such a great set of experiences. It leads to that really important first question that we always ask our guests. Um, tell us about a crazy number that you were assigned. When you got assigned that number or you decided to chase it, what did you do?
[00:06:11] Daren Lauda: It's possible. You said, no way in heck, I'm not gonna do that and quit. You could have said, here's how I'm gonna go about it. Tell us about that big, crazy number.
[00:06:18] Sean Crafts: So this is a harder question you'd imagine 'cause I've had too many big, crazy numbers. So. My run. You know, you look at 1999 through 2021, inside of those two startups, inquire and Mavenlink.
[00:06:36] Sean Crafts: That was the heyday of growth. Like it was all about revenue and there was so much pressure coming from every direction to grow, grow, grow, grow, grow. Valuations. Were predominantly oriented around growth, so and I being always on the sales, marketing strategy, customer success, retention, expansion, renewal.
[00:07:00] Sean Crafts: It's always in my life. Uh, it just numbers constantly. Uh, coming at me from boards, investors, uh, and CEOs, I, I think the one, the one that was the most poignant because it was the, the, I think the most acute miss and the biggest pain was, um, 2015. We had, uh, just raised, uh, I think it was 19, almost 20 million so large our, by far, our largest round to date.
[00:07:29] Sean Crafts: Um. It was a series B round. It was an interesting, we, we had coming into the round and then people probably have PTSD as I say this out loud 'cause I'm sure a lot of people experience it. We were running low on task, so we had, we had started to, to lighten some of the very intentionally, some of the, the variable spend things.
[00:07:51] Sean Crafts: So. Top of funnel creation, you know, ad spend, things like that had lightened. We had just because we were closing the round and to make sure we hit up our targets, had pulled a lot of deals in through discounting other things. It was a Herculean effort. Incredibly proud of the team for pulling it off. In my role at the time was responsible for marketing, one of the sales divisions, and in this overall role we had created called Growth and Strategy.
[00:08:18] Sean Crafts: So I was in, I had a data science team reporting to me. We were trying to the best of our ability. To forecast the business, what was going to happen and what we needed to do. And so we were playing all of these games coming into the round, and then at the round, the CEO, uh, and the board decided, Hey, this is amazing.
[00:08:38] Sean Crafts: We're gonna go spend this $19 million, primary goal is growth in the sales department. We're gonna double the sales. Actually, we're gonna give you almost 250% on sales. With all these great attainment numbers you had last year, we're gonna give you a little bit of ramp time for the sales. We get it, but we think we should be able to do, you know, 250, 300% year over year.
[00:09:00] Sean Crafts: And at the time, I, I knew it wasn't right and I was pulling all of, I, I had marketing every number you could imagine. I'm like, here's okay. By the way, this is how long it's gonna take me to read. Keep like these leads? Well, no, just double the website lead Sean. I, I, I can't do that. I can, I can spend more money on top of funnel PPC on advertising, but that's kind of a, just a drug.
[00:09:23] Sean Crafts: Like it's, it's, it's not, it's a, it's a short term fix. It's super inefficient. No, we can't do that. Yeah. Yeah. So you're like, you're like, so you're trying to like, walk them through, like, okay, here's our options, but here's what that, that marketing funnel looks like. And they're like, oh, no, no, no, but you've got, you know, $5 million in pipeline.
[00:09:39] Sean Crafts: I'm like, okay. Most of that is stale. Probably needs some cleaning out. It it if maybe there's a million in that but you're having me build and there was also new, new markets they really wanted to go into enterprise. I'm like, I don't have any enterprise pipeline. Like we're starting from scratch. I can tell you historically, generally speaking, how long just the marketing funnel tooks on that.
[00:10:03] Sean Crafts: I don't have visibility into what our enterprise sales cycles are gonna look like. Guys, this isn't gonna fly. Like, oh, this is the attainment numbers. Last year were, you know, 84% a across rim capacity, Sean, we, 70% is market. We can do 70%. I'm like, this is not about sales. Capacity or attainment, it's about a funnel.
[00:10:27] Sean Crafts: And I could not, for the life of me, figure out how to visualize that funnel for the board and my CEO in a way that we were on the same page. We were just buddy. It was
[00:10:37] Daren Lauda: just butting heads. So let's double click on that. You got a 300% growth member, you got some money, and you got this expectation that spend a little money, things will just fall like magic from the heavens.
[00:10:48] Daren Lauda: Your bookings are gonna grow. It's gonna be awesome. Uh, what did you do? How'd you go attack that?
[00:10:53] Sean Crafts: Well, we did everything we could and, and we, so the first thing we did was we, we definitely maximized what we had. And so the other thing, I didn't have the flexibility from the strategy of the organization.
[00:11:05] Sean Crafts: We wanted to move up market. So one of the things I could have done was spend heavily, heavily, heavily on the SMB inside sales motion that we had working. And I could have doubled or tripled that with the right amount of span. But that, again, that was another blocker, like the, that was a strategic imperative to go up market.
[00:11:26] Sean Crafts: So we, we hired as much as we, we, we, we did, we, we cheated a little bit and we intentionally threw a little extra juice in the s and b. So that number did basically triple, which was great. But the problem was the other pieces weren't there. So the mid-market, which was a younger group, we, we, that one was supposed to more than triple than our enterprise was supposed to create a new piece on top of it.
[00:11:48] Sean Crafts: And that's really how you got to the overall number. We added everybody. We built the marketing engines as best as we could. Uh, we started tracking everything in terms of timing. But really what we started to do was document the process so that we could start to, 'cause, 'cause we knew, we knew we weren't gonna get there.
[00:12:07] Sean Crafts: And I finally just, I went and, you know, to the data science team, I'm like, folks, I need your help. Like, I need, I need a way to, to talk about how this is going to play out and all of these things. And then as we're beginning to track and get new data on what the enterprise funnel looks like, what the, you know, the upper mid market funnel looks like.
[00:12:25] Sean Crafts: How is that gonna play out? So it, it, um. We threw everything we had at it. Uh, we stayed within the strategic guidelines and we missed by like 35%. And it was, it was brutal. Because the other thing, if you can think of it at that point, because we had met new functions, new business, that we were growing into enterprise and mid-market, we had to anticipate and build into that what a customer success organization was gonna look like.
[00:12:50] Sean Crafts: And I was responsible for all of that too. And so we had all of these people hired, trained, and ready for. 40% of deals that didn't come.
[00:12:58] Daren Lauda: Wow. So 300% growth number, really hard to go get, had to build structures to support it, and it kind of missed, um, it kind of missed, we, we, we completely missed.
[00:13:09] Sean Crafts: But no, I'll say this.
[00:13:10] Sean Crafts: What's interesting is we missed, but it was, and I, and I try to describe this to people, oftentimes misses our lags. We did hit the number. We got to that run rate probably six to eight months after we anticipated it because of a, just a lack of understanding of how the funnel was gonna work in those dimensions.
[00:13:35] Sean Crafts: And so we just, it, it, it came like we got onto that run rate. It
[00:13:39] Daren Lauda: just, we were six or eight months buying. You and I have talked about this along the way. One of the things that's always been hard in go to market is understanding the win on return on investments. Right. Marketing wants to tell you when they can kind of create the leads.
[00:13:54] Daren Lauda: For example, sales doesn't know what they're gonna deliver until they see the leads or build it themselves. And when finance is trying to make an investment, that win is really important. And so I think what I heard you say is you actually build out the right plan. The win was off by about six to seven months when the deals actually fell.
[00:14:10] Daren Lauda: That's right.
[00:14:12] Sean Crafts: Yeah.
[00:14:12] Daren Lauda: And it, and it
[00:14:12] Sean Crafts: was the fallacy of the spread. Like, oh, I create this many leads here. Those leads turn into this many dollars. My sales cycle is six months. I will see those dollars in six months. No, that's not right. And it, and it's. Or the other fallacy, I have 100 quota carrying reps.
[00:14:36] Sean Crafts: They have a million dollar quota. They have attained historically at 70% it, that's 70 million. If I add another a hundred next year, I will have another $70 million. My number should double. So if she's, that's mathematically a way to explain the past. It is. There is no forward looking. Mathematical validity to that concept, but everybody does it.
[00:15:01] Sean Crafts: It's like, okay, I'm gonna double my capacity. Certainly. I'm gonna double my, my number. I know.
[00:15:08] Daren Lauda: No, there's so many nuances under the cover. Uh, we talk about dimensions, sometimes segment, geography, channel, how things are gonna flow through each of those average cell price. Are they, um, increasing or decreasing?
[00:15:20] Daren Lauda: How do they behave seasonally? There's so many layers. To building out that plan that you can't get with cells in a spreadsheet. And I think it's really important that people start to realize that and start to automate more of these flows. So at the end of the day, you made the number maybe six months late, and it sounds like maybe you caught legs after that because you went on to have a nice exit.
[00:15:40] Daren Lauda: Right. The story ended well. Well, and we had some advantages at the time.
[00:15:44] Sean Crafts: You know, in my role with the founder hat on, I was able, we had relatively good connectivity between sales, marketing, professional services, and success at the time, which is unique. We had a data, we had the benefit of a data science team that was pulling all the numbers out for us.
[00:16:02] Sean Crafts: We had a very mature sales function. We had a very mature marketing function. I think what, what we focused on from that miss was being able to really see duration. You mentioned that as a key element of the funnel and understanding connect, connecting it, not in aggregate, but connecting it by channel, by channel.
[00:16:24] Sean Crafts: Funnel by funnel and being able to look at it across those different cohorts. And as we started to build that, that muscle, we got really, really predictable in terms of what was going to ha, we used to call it like what we need alignment on reality as of today. Now, then, then, then, then let, let the games begin.
[00:16:49] Sean Crafts: Let's figure out where we want to go, what we wanna add to that, what, what's reasonable, what's not reasonable. Um, but getting the CEO, the CFO, the C, the CRO, the CMO, the, you know, CCEO, all to agree on what our business look like. Without any changes, I think was one of our biggest successes post that experience.
[00:17:15] Sean Crafts: And the, and, and the, and the good news was it was so acute for all of us from a sales team. Nobody made their, you know, our earnings from a marketing team. We felt like we were, you know, it was one of the best years ever. And. Everybody felt like a wwa. You know, like we, we felt like we built these new channels, we created these new lead sources, we created these new messages, messaging platforms.
[00:17:38] Sean Crafts: The product team felt like we had to, you know, everybody felt like they had put so much into it, and it felt so demoralizing to miss by 40%. All of us looked at each other and like, we're not doing that again. Like, we're not gonna let you know. Customer success is sitting there with a bunch of people who not.
[00:17:56] Sean Crafts: They're fighting. And it was one of our biggest accomplishment, I think, was to make sure we didn't lose any of those people. Like, you know, we, we, we, we ate it and we just, we ate those salaries for that six to eight month window. But I think having that kind of an experience across the board where everybody there was buy-in.
[00:18:13] Sean Crafts: So when you went into that next phase of, okay. We need everybody partic everybody's participation. We need the data cleaned up. We need the, you know, alignment. We need to have, we, we created a whole process. We need to have a meeting on a bimonthly basis where we sit down and we say, okay, where are we today?
[00:18:32] Sean Crafts: What's changed since the last time we looked at this number? Are we good with it? Is there anything we need to think about doing? Or are we comfortable with where we are? Oh, and by the way, the truth does change, you know, like. Oh, hey, we, we thought this product was gonna be released on this date. Now that date has slipped for reasons that are beyond our control.
[00:18:52] Sean Crafts: We were expecting a 10% sales lift when that product was released. We now lost a, a quarter or two quarters on that. How are we gonna make that up? And the, the dialogue and the conversations in that level. Where you're actually working together, as opposed to the end of the year, everybody pointing fingers, well, I missed because sales product didn't deliver this thing well, sales has still got $7 million a pipeline there.
[00:19:17] Sean Crafts: These were closed out. Shouldn't have mattered that I missed a product. Deliver. Well, marketing gave me some shit leads. I mean, it's like, it just, it, it was such a different dynamic when we all started operating off of the same core set of numbers. Like, Hey, this is, this is what I'm seeing. This is what it is today.
[00:19:36] Daren Lauda: What do we do from here? Yeah. It sounds like you had those, those famous top gun meetings. Uh, where'd he go? Where'd hug go? Everybody's pointing fingers and wondering. It's so great to get outta that and be aligned, isn't it? It radically,
[00:19:49] Sean Crafts: radically shifted like our ELT meetings because now there was, there, there wasn't.
[00:19:55] Sean Crafts: It was almost like people were, people were building their spreadsheets, building their, their data sets, building their story, wasting so much time to come into the meeting to CYA, like, Hey, this is why I delivered everything I was supposed to deliver. The time waste on that. That is just, there's, it disgusts me, Mike, it's like that in, in a world where there's not enough time anyways, why are we spending time doing that?
[00:20:19] Sean Crafts: Like, shouldn't we be spending the time that we have, like, okay, what are we gonna go do going forward? How can we make this better? How can I help my teammates? Hey, something, nothing always goes perfect like. Sales lost a couple people. They, you know, great top performers, they weren't expecting to lose, okay, marketing, we gotta make it up.
[00:20:38] Sean Crafts: Success, we gotta make it up. We need some more expansions. We need like those kind of like having that kind of an ELT meeting. That to me was one of the best parts about it was just the made work fun. Like you're going in with your teammates.
[00:20:51] Daren Lauda: I love that. I know an ELT team is working well. When the idea is this core metric is off, what are we going to do?
[00:21:00] Sean Crafts: Yes.
[00:21:01] Daren Lauda: Right. Not. What are you going to do when you get to that mode and you brainstorm together and you work from data. Work is fun when you're in the coffee room plotting against your enemy, right? Sales versus marketing. Marketing versus finance. I. Life is miserable unless you're a desperate Housewives fan, I guess.
[00:21:17] Daren Lauda: But that's not my style. I would much rather be working together. Hey, so let's bring things more current. Congratulations on the, the exit story of that. I know that you guys built the company. You had a fantastic exit. Uh, I know a lot of the people that were there. I worked there for a time. Um, and I'm really happy for you all.
[00:21:33] Daren Lauda: But let's talk about today after all that you kind of said your wife thinks you're crazy. Sometimes you decided to build something new. You started a venture studio. And inside the studio you created an entity called HLX, right? And you're kind of teaching people how to do this now. How do you go about teaching companies that you're working with, how to do what you did, how to learn from your mistakes or lessons?
[00:21:55] Sean Crafts: Well, it's, it's, it's interesting and, and you know, definitely learning a lot on, on how to be a quote unquote consultant. And, you know, we, we position against that a lot in the marketplace where, you know, we were like, we're not really consultants. We're all practitioners who are coming in here. And, and our mindset is gonna be like, we're, we're joining you guys as part of the team and.
[00:22:16] Sean Crafts: As operators, not as consultants, but there still is that element of, okay, new kids on the block, what do they got? What, you know, it's, show me what you got and what, what I, I think we're doing a good job right now of, on the HLX side is, is orienting around data first. Like it's very difficult, especially coming in.
[00:22:40] Sean Crafts: And, and certainly they're, they're, they're seeking our expertise, which is wonderful and appreciated. But at the end of the day, like walking in there as an outsider and saying, oh, you don't have a chance in hell at hitting that number. It's just gonna turn into a pissing out test. Like, why do you think that?
[00:22:55] Sean Crafts: Why do I think that? And so, rather than make any forward looking or, or even present day critiques, we, we really try to focus on can we just. All get our hands around where things are today. It's the same concept because we almost think of ourselves as we're now joining your ELT. We wanna help build an ELT that works in this way.
[00:23:18] Sean Crafts: And oftentimes you can imagine if someone's interested in bringing in someone like HLX, it's sometimes it's from like a founder led sales motion to a, um, professional sales motion. Sometimes it's something that's not working in some element of the go to market chain, up of the funnel feels like. Sales execution feels off.
[00:23:40] Sean Crafts: Retention isn't where it needs to be. We have no, you know, cross sell expansion motions. There different, different things that are gonna be, but there's something that the, the leadership feels isn't working or they might have lost someone, you know, and they need us to come in and fill a gap. If we're coming into all of those situations, the first thing we want to try to do is build that alignment.
[00:24:00] Sean Crafts: And the way we do it right now is, is focusing on the things we were just talking about, like get, get the data set. In front of everybody, get alignment and agreement on what that data set is. Expose strengths and weaknesses of the entire funnel as it exists today. Like how are things working? Do we, are we comfortable with this?
[00:24:20] Sean Crafts: Make sure that we have. Some reasonableness to the goals that the organization has, like what they're trying to achieve, and, and do we see a path to that? And then use that. Uh, we often talk, talk about like a foundational layer. Like, okay, we're, we're now all standing on the same, on the same foundation.
[00:24:42] Sean Crafts: We're all now gonna, let's just, let's
[00:24:44] Daren Lauda: block arms and let's go figure out what we do next. And so are customers really, um, adopting or adapting to the mentality of. I can now see the trajectory. I now believe this, I understand the data. Let's figure out how to work from there. Or do you find people kind of regressing back to their fiefdoms and departments and the battle?
[00:25:02] Daren Lauda: How well does it come together in your opinion?
[00:25:05] Sean Crafts: It's a great question and, and I would say, so right now we probably have nine active engagements. Um, and of those I would say. More than half, uh, are had really, it's a, becomes a very good conversation. Uh, a good working relationship and good alignment. I think there, uh, to be realistic as you're coming into these situations.
[00:25:35] Sean Crafts: Um, there's no client I'm gonna. Talk about directly, but you know, indirectly in general, imagine, imagine there's a gap in, in the team, just somebody's left. There's a, when you've been kind of in these fiefdoms for a long time, there, you have to move through that fiefdom mentality. So the data becomes, it's almost like the olive branch towards that.
[00:25:59] Sean Crafts: Like, Hey, let's, let's, let's all, let's. Let's sit down at the table, let's bring bread together and let's talk about these numbers. Are these, do these feel right? So I think it, it, it does, it does take time to get into that, that new way of thinking, that new mindset. And a lot of it becomes top down support where someone's like, Hey, we're, we're not gonna, they're not gonna continue to operate in these silos.
[00:26:25] Sean Crafts: Like, that's great marketing that you think you've hit your. Top of funnel lead generation goals, how do those goals tie to our sales qualified leads? How do those goals tie to our, our bookings targets? How do those goals tie to our strategic imperatives as an organization in terms of type of deals we wanna sell?
[00:26:46] Sean Crafts: How do those deals tie to profitability? How do those deals, you know, how, what's the ROI we're getting on these different channels like. All of those things. If you live in a, in a silo and you've been able to comfortably live in that silo, you don't want to answer all those questions. Sometimes it makes your job potentially more complicated.
[00:27:05] Sean Crafts: But I think once you can get people past that in a way that we're not trying to expose this to punish you, we're not trying to expose this because your job's at risk, like we're trying to expose this 'cause we're gonna do the same thing across every element of this, this go to market engine so that we can make it better.
[00:27:24] Sean Crafts: And that there are things that if, if sales understand, hey, this is where you're coming from, this is the type of funnels, and you understand from sales perspective what they're trying to achieve and what their goals are, we might be able to change the mix up and you might get. More dollars for investment.
[00:27:39] Sean Crafts: You might get more team members for new channel openings. You might get more, more, uh, flexibility on your lead targets. Like, Hey, we get it. We know we're gonna move into these new markets. The leads aren't gonna be there overnight. We can drop that number. That's okay. We can all be on board with that. So I think getting
[00:27:55] Daren Lauda: into that, I would say does take time.
[00:27:57] Daren Lauda: That's a really fantastic model. It does a couple things that I love. Number one, it uses data, right? Which takes opinions out of things. Number two, it can help quickly negate the loudest voice in the room problem. You know, the person who screams the loudest about their wants, needs, desires, or beliefs, often gets their way.
[00:28:15] Daren Lauda: And I think that can be eliminated when you use data in that way. That's, that's really, really cool.
[00:28:19] Sean Crafts: Let, let me say one more thing is you, you, you, you just, you, you triggered something for me. The other thing that's really nice about it is. O oftentimes we're coming in with support, you know, from the highest levels inside these organizations.
[00:28:33] Sean Crafts: And so we have to build and earn the trust of, you know, the L one team and the L two team. One of the things we tell to them always, and it's, and it's sincere, and we, we tell the CEOs this, we tell the CFOs this, like, Hey, we're also gonna help your team make sure that they, you're putting reasonable goals and targets in their world.
[00:28:56] Sean Crafts: A heads up and, and it's true. Like it is not just, Hey, let's expose everything that's going on here at the L one, L two level. It's also, Hey, let's expose what's realistic for. Our CEO, the goals that they're setting within the board for our CFO, with the financial targets that we've built for the organization, getting that whole connectivity.
[00:29:21] Sean Crafts: It's, it's, you know, it's not just the sales and marketing leader, the sales, marketing and ciso, it's, it is getting that finance leader on board, getting that CEO on board and let's, and let's put our collective heads together. This isn't just a sales problem, this isn't just a marketing problem. You know, new business is a company problem.
[00:29:39] Sean Crafts: How do we solve that company problem? And having the data set that everybody's agreeing to is, is, we always believe step one for that. Like once you have that, now let's have some conversations.
[00:29:50] Daren Lauda: And you know, once that CRO is a, is a believer that the whole company's behind here or she, it's a lot more fun when the entire executive team can chase targets.
[00:30:01] Daren Lauda: That you said are reasonable and realistic. Um, I love that idea. Um, I think sometimes there's gonna be a little bit of stretch to them. Yeah. Um, but it shouldn't be strain and pain. It shouldn't be impossible. I love the idea of stretch, not strain. Um, and I think the data can drive us to that point. Here's where we could get to if we really execute perfectly, knowing we probably won't execute perfectly.
[00:30:21] Daren Lauda: We can get to 95% of that. Let's go do that.
[00:30:23] Sean Crafts: The other thing that, that. Is really important, I think, is people recognizing that realistic, like you said, realistic goals doesn't necessarily mean lowering growth. It just means putting the appropriate investments, the appropriate resources, the appropriate time and appropriate strategy around the growth.
[00:30:48] Sean Crafts: And so that's another thing that we're, we're constantly working, kind of managing upward and managing downward. You have to find that alignment as well. Just because this is the world without any change, doesn't mean that has to be our world. Like, let's go make some things happen. And this is where you get into the stretch.
[00:31:04] Sean Crafts: Like, let's, let's make these investments in, in marketing, let's make these investments in our sales organization. Let's make these investments in products to go make this happen. But at least now those become the basis and, and we would call them basically assumptions like, you've, you, these, let's all greedy.
[00:31:20] Sean Crafts: These are the things we're saying are going to happen in order to hit our number. So then when you get to the end of the line and you hit, or you miss the number, it's not everybody pointing fingers, you know, CEO telling them, well, this is a sales execution problem. Part of it might have been, and let's go talk about that.
[00:31:38] Sean Crafts: Like, did our sales cycles expand? Did our close rates drop? Did we have attrition that we weren't anticipating? Did we have, and let's talk about that, but let's make sure back to that. It's not just sales. And similarly, it's not just marketing like, okay, great marketing dropped total lead volume year over year.
[00:31:56] Sean Crafts: Marketing didn't hit their lead volume targets. But you know what? If the quality went way up, marketing might have exceeded. And if we, if we could show that, hey, listen, we used to call it a yield number. You should be able to look at the top of funnel creation by channel, by segment, by product, by geography, by all of these different things.
[00:32:14] Sean Crafts: And you should be able to say, what is the yield I'm expecting out of that top of funnel creation? Marketing is responsible for giving you that number. Sales is responsible for delivering that number. You can look at both of those numbers and say, well, and not not, and it's not talking about like a total number of leads.
[00:32:32] Sean Crafts: It's talking about that lead should turn, should be worth this much in bookings over this horizon of time. When you get to enough statistically significant leads, you can get really good about this mar if marketing didn't deliver on the total number of. Bookings dollars. The total yield we used to call it, that's a marketing problem.
[00:32:53] Sean Crafts: If sales didn't execute on the expected yield from those leads, that's a sales problem. And that's okay. That is, that is, you know, we should be accountable for these things and these are the things that we should all talk about, but we should also know them sooner. Like, Hey, heads up we're behind, marketing is behind, or sales is behind, and that's where it gets fun.
[00:33:16] Sean Crafts: That's where it's like, okay, well. Get it. We're in the second quarter we're, we lost a couple salespeople. We weren't expecting let's juice our total, our total yield number a little bit, let's give sales a little bit of cushion coming into the rest of the year or, and by the way, one of the best conversations, best board meetings they ever had, magic convincing a board we were gonna miss by 15% in a fourth quarter.
[00:33:37] Sean Crafts: And having them walk away, like, shake your hand walking on and they're like, that was the best board meeting you've ever had. The reason why they said that was because I was able to show them. Hey, listen, we're now here sitting on June 1st. I am going to miss the fourth quarter by 15%, but I. I'm doing these things right now and I'm going to exceed our run rate for the first quarter and second quarter next year by a combined 20%, you will get 5% more than I've you've anticipated, but we're gonna miss in the fourth quarter, and by the way, I'm not gonna spend any more money.
[00:34:13] Sean Crafts: We're gonna hit all the efficiency targets, you win and we're gonna be up plus five. Sounds good, Sean. That makes sense. Good thing I told them just to kind of. You know, I was pleading the horse to water. I guess I, I showed them, hey, there is a way to make up that 15% in the fourth quarter. But because we're sitting here today, June one, it's a really small set of things that I can go do.
[00:34:36] Sean Crafts: There's a lot of, you know, low intent, high cost paid advertising that I can do just in my small business segment, because that's the quickest turnaround in quicker sales cycles. That's my only chance I can do it. But it's gonna cost you X. My recommendation is we don't do that. We do these other two things and then I can, as long as you give me the grace to make it up in the first quarter of next year and second quarter, rather than
[00:35:00] Daren Lauda: having to hit it in the fourth quarter.
[00:35:02] Daren Lauda: So let's make sure everybody gets that. This is really an excellent, excellent moment. Sean just said, I told the board I'm gonna miss the number by 15% in fourth quarter. They a high five demand and said, you are awesome. Because, yeah, the data, which A predicted that 4, 5, 6 months in advance B said, here's how I can make it, and here's the cost, but it's inefficient.
[00:35:24] Daren Lauda: C, here's the result that I'll deliver in first quarter if we keep doing things this way. That command of the data, that predictability that's being created so you can make really smart investment decisions, quite frankly, isn't how a lot of SaaS companies operate. They get caught up in this month and next month, maybe this quarter, maybe a little bit in the next quarter, but that forward thinking look I think is really huge.
[00:35:47] Daren Lauda: And uh, you know, that might be your best big, crazy number ever. I remember the time I told the. Bored I was gonna miss by 15%. And they said, Sean, you're a hero. By, by the way, that would be, that was after I missed by
[00:35:58] Sean Crafts: 40% the year before.
[00:35:59] Daren Lauda: So
[00:36:00] Sean Crafts: I had some, I
[00:36:01] Daren Lauda: had some making up to do. So the misses were getting better.
[00:36:05] Daren Lauda: Hey, look, we're getting close to time. Sean, I'm gonna come to you with that final question that I always ask in just a minute. I. But I do wanna give a shout out to HLX because they helped sponsor the show today. Um, so we're really glad to, uh, have them as part of our podcast this week. So they're a go-to-market advisory firm that helps high growth.
[00:36:19] Daren Lauda: B2B companies scale smarter. They blend strategic consulting with execution and whether they need fractional leadership, Salesforce expertise, HubSpot expertise. Cross-functional support across sales marketing, rev Ops HLX is right there to work alongside you. So if you wanna learn more about HLX, please visit team HLX Hotel Lima X-ray, team hl x.com and check 'em out.
[00:36:42] Daren Lauda: So Sean, last question before we let you go. What's the one thing in go to market that people should be thinking about or talking about more, but just aren't? I am
[00:36:53] Sean Crafts: continually, continually shocked that. Organizations, and I don't wanna put an upper limit or a lower limit on this. I feel comfortable just saying pretty broadly.
[00:37:08] Sean Crafts: Organizations that have some level of volume of of historical information and data at their fingertips are not able to turn that into an understanding of what I would say the as is model. Like what does their world look like today? I forget about everything else. It blows my mind that organizations have lived for so long in a world where they can't answer the question, if I don't change anything, what's going to happen?
[00:37:45] Sean Crafts: That, to me, is shocking, and it, it pains me because that number is infinitely knowable. Now exactly what's gonna happen in the future. A little bit harder in terms of be based on things that do change, things that you add things, but you should be able to, to, to put together what is a bookings forecast gonna look like if I continue to do things the way I'm doing things.
[00:38:10] Sean Crafts: And to me it's a, because it's so infinitely knowable. It pains me because I've watched then the trickle down issues because that number is not known. How the, the, the culture just down to even the, the, the straight culture is very siloed, very protective, very CYA, not team oriented. And, and as these organizations get bigger and bigger and bigger, you watch it and you see it, these silos get deeper and deeper and wider and wider.
[00:38:42] Sean Crafts: It bums me out. And, and by the way, I love working in Smart S 'cause you don't have time for silos and it's, you know, you can't do it. It's, it's, but to me that as I see these organizations on the HLX side and, and in talking to friends and talking to people in the industry, it's, um, yeah, the, the, the one thing that it, it bums me out in a huge way, is that people can't get their hands around what it, what it is today.
[00:39:08] Daren Lauda: Really. Well said. Look, I was in the Army a long time ago. Uh, when I was young and dumb, so to speak, um, when they taught us map reading, it was pretty basic. You can't get to where you're going if you don't know the starting point, right? You'll never get there. And once you know the starting point, if you gloss over that and look at all the obstacles in the way and start thinking about obstacles without really knowing, Hey, where am I?
[00:39:30] Daren Lauda: Um, and making a plan to get there, you're never gonna get there in a timely fashion. It's not gonna be efficient, and you're not gonna be happy with results. Hey, Sean, thanks a million. I really enjoyed this conversation. You've got such a great experience set and so much to share. I hope you come back on the show again someday.
[00:39:44] Daren Lauda: Thank you very much, sir. Really enjoyed it. That's it for this episode of How'd You Get That Number? Make sure to follow or subscribe wherever you get your podcasts, and if you want to keep the conversation going, connect with me on LinkedIn. I'm Daren Lauda. Thanks for listening. See you next time.